Definitions:

Cost sharing: The share of costs covered by insurance that the consumer pays out of his or her own pocket. This term generally includes deductibles, coinsurance, and copayments, or similar charges, but it does not include premiums, balance billing amounts for non-network providers, or the cost of non-covered services. Cost sharing in Medicaid and CHIP also includes premiums.

DRG payment system: DRG is short for Diagnostic Related Grouping, a system first implemented by the U.S. government in the 1980s for determining how much Medicare should reimburse hospitals for medical care. Hospitals are paid a fixed rate for inpatient services corresponding to the DRG group assigned to a given patient. The DRG payment system is also used by a few states and private health plans.

Health Care Delivery System: A health care delivery system supports the interaction of one or more people who seek advice, and/or treatment, for a physical or mental problem from others who have the knowledge to advise or treat that problem. The system can include as few as two individuals or an organization of people, institutions, and resources that deliver health care services to meet the health needs of individual or larger populations.

In-Network: In-network refers to providers or health care facilities that are part of a health plan contracted network.

Managed Care: A system of providing health care, such as a Health Maintenance Organization (HMO) or a Preferred Provider Organization (PPO), that is designed to control costs and improve quality through managed programs in which the physician accepts constraints on referral and treatment options and on the amount charged for medical care and the patient is limited in the choice of a physician.

Mandated Benefits: Insurance benefits required by law.

Medical Home: A “Medical Home” is defined as a consumer having access to a Primary Care Physician coordinator, selected by the consumer, who is the coordinating physician for all health system interfaces. That physician is patient- centered, is wholly accountable for a patient’s physical and mental health care needs (including prevention and wellness, acute care, and chronic care), directs a team that coordinates care across all elements of the broader health care system (including specialty care, hospitals, home health care, community services and supports), is accessible 24 hours a day/7 days a week, and is committed to quality and safety.

Medically Necessary: Health care services or supplies needed to prevent, diagnose, treat, or rehabilitate illnesses or injuries.

Out-of-Network: An out-of-network provider is one which has not contracted with the insurance company.

Physician-Hospital Organizations (PHOs): A management service organization in which the partners are physicians and hospitals. The PHO organization contracts for physician and hospital services.

Quality of Care: Health care quality is the degree to which health care services for individuals and populations increase the likelihood of desired health outcomes. Every American has his or her own definition of high-quality health care. For some people, that definition revolves around whether they can go to the doctor or hospital of their choice. For others, it means access to specific types of treatment. The Institute of Medicine defines quality health care as “safe, effective, patient-centered, timely, efficient and equitable.”

Tort: An action that wrongly causes harm to someone but that is not a crime and that is dealt with in a civil court.

Transparency: As used in science, engineering, business, the humanities and in other social contexts, transparency implies openness, communication, and accountability. Transparency is a lack of hidden agendas and conditions, accompanied by the availability of full information required for collaboration, cooperation, and collective decision making, including the disclosure of agreements, dealings, practices, and transactions for verification.